Top VCs predict what 2025 holds for Commerce
Trade, or the buying and selling of goods globally, is one of the biggest drivers of our economy and continues to see rapid evolution. Going back to early 2024, venture capitalists were hoping for a year that would see a thaw in venture attraction and more dry powder distributed to promising businesses, with AI taking top billing in the minds of many investors as the next big thing (see last year’s Trade predictions from top VCs). At the end of the year, two things were clear: the investment meltdown hadn’t quite materialized as expected, and AI is no longer the next big thing — it’s just the big thing, period.
In reality, while venture funding last year saw its first growth since 2021 according to the latest CB Insights State of Ventures report, with the fourth quarter of 2024 marking the strongest quarter since the first quarter of 2022. overall investment levels remained below 2020 highs. AI-related deals grew to 37% of all investments in past, up from 21% a year ago, leaving many to wonder if we’ve reached the “peak of the AI bubble” — or if there’s still a long way to go. Notably, consumer sectors failed to crack the top 10 investment categories in 2024, which highlights ongoing challenges in the space — or, perhaps, that while investors flock elsewhere, there is misappreciated risk in the trade.
Looking ahead to 2025, some big changes in trade seem inevitable. The growth of the “Aquarius Economy,” one where human creativity and digital tools converge, will accelerate, with the creator economy projected to exceed $500 billion. A new generation of simple e-commerce platforms for creators and SMBs seems ready to emerge, as existing solutions have become too complex and expensive. Meanwhile, the era of deglobalization will deepen, affecting US-China trade in particular and spurring unprecedented investment in domestic manufacturing.
From here, let’s dive into what the top Commerce VCs predict for the key trends in 2025:
Expansion and Experimentation in Brand Marketing, Plus an IPO
“Influencer marketing will expand widely beyond beauty and fashion into other digital sales verticals – health, travel and beyond. It will also continue to become more programmatic in spend and ROI-driven versus a budget item within influencer marketing Brands launch LLM- Enabled personalized shopping assistants directly on their e-commerce sites, but public results will be mixed.” – Amy Wu Martin, partner, Menlo VC
Media Diversification and M&A Activity
“A few areas in commerce that I’m particularly interested in in 2025: Ad inventory will diversify as gaming / Applovin, CTV and media ads continue to take part from Meta / TikTok. Influencer marketing will continue to grow, especially among offline brands looking for Brand Elevation A big M&A year for consumer brands, big and small, as strategic buyers are no longer shackled by regulatory or high barriers. interest rates.” – Sasha Kaletsky, Creator Ventures
AI-Powered Search takes center stage
“The rise of AI-Search on platforms such as ChatGPT, Perplexity, GoogleAI and many others will drive retailers/brands to focus on how their company, products and services are appearing in these results. In simple terms – they will be AI search SEO focused This is likely to be more challenging than Google focused SEO as brands/retailers compete to be included in the response of alone, rather than trying to make sure they are in the top search listings In 2025, brands/retailers will pay more attention to how their sites are crawling and ‘turn to third-party providers to help correct and optimize their location. AI searches.’ – Matt Nichols, General Partner, Commerce Ventures
Reimagined digital shopping experiences
“Today’s e-commerce solutions are modeled after brick-and-mortar store experiences dating back decades. Merchandising by category (akin to ‘passes’) and relying on consumer search has become increasingly a burden as the number of locations where to buy, items by category, AI price and review aggregation and AI agents enable a proactive shopping experience that can truly be built for an efficient one-to-one digital format. personalized suggestions based on an individual’s unique preferences and calendar, taking the mental burden off consumers and turning us into a more efficient and enjoyable shopping experience.” — Jenny Fleiss, co-founder, Rent the Runway, Jetblack and Roll Rider + angel investor / advisor
Transforming traditional retail
“Consumer retail is dead. Long live consumer retail! The narrative that traditional retail is in decline has persisted for years, the truth is that the industry is simply transforming to meet the demands of a changing consumer landscape .The most innovative and beloved retailers, those that cultivate a devoted following—such as Erewhon with its premium grocery experience, TJ Maxx with its treasure hunt shopping appeal, and Solidcore with its fitness model—not just surviving, they’re thriving by delivering exceptional value, creating unique experiences and fostering emotional connections with their customers—is being reimagined for the next generation of consumers.” – Jeff Truong, Broadway Venture Partners
A return to originality and the evolution of health care
“From agents to authentic. Consumers overwhelmed by choice and bombarded by hyper-personalized offers will look for ways to cut through the noise and find trusted brands to stick with. Emotion and experience will trump efficiency. We will to see a resurgence of bespoke and bespoke ‘wow’ store experiences, high street renaissance, pop-ups, in-person events, brand collaboration and interactions Humanity will defeat consumerism, and with a post-crisis Los Angeles mindset, we will be more grateful for the things we have and more discerning about the things we love and that evoke emotion will win.
Eventually the consumption of health will occur. Healthcare providers will shift from admin-heavy operations to empathy-driven care, with a focus on holistic health and longevity. Consumers flush with HSA/FSA dollars and new ways to spend them will drive a shift of dollars into health-adjacent categories, including custom supplements, facial lasers, PRP hair loss treatments, nootropics and alternative therapies that were previously unavailable. . We will continue to see these consumer healthcare offerings popping up in malls and high streets. Insurers and providers that do not modernize and take a customer-centric approach will not survive, and healthcare advocacy and navigation companies like Sheer Health will continue to thrive.
Last Mile Revolution – As brands battle for customers, the last mile will define the customer experience. Literally, brands will have to meet the customer where they are. Consumers will want their packages to fit around their flexible lifestyle. This will require agility in the middle layer to get packages to customers wherever they are, at the specific time they want. Smarter robots will ultimately enable this change by driving more cost-effective and sustainable distribution.” – Amanda Herson, General Partner, Founding Collective
Several main lines are clear from these predictions: First, the pendulum is swinging back toward authenticity and human connection in retail, even as AI capabilities expand. While AI will eventually transform everything from inventory management to customer service, the most successful brands will use it to enhance the human connection their brand provides, rather than replace it. Second, the creator economy and influencer marketing sectors are evolving beyond their beauty and fashion roots into more sophisticated, ROI-driven arenas spanning multiple verticals. Third, traditional retail is not dying, but transforming, with physical spaces reimagined around community and experience rather than transactions. Finally, the broader economic and geopolitical context of deglobalization will continue to push brands to rethink their supply chains and distribution models, with implications from manufacturing to last-mile distribution.
While consumer may not have been a major sector of venture investment in 2024, the intersection of these trends suggests significant opportunities ahead. With last year’s AI-focused mega-rounds and early-stage deals representing 74% of total activity, 2025 promises to be a pivotal year for the evolution of commerce—a year where the most successful companies will find ways to harness technological advancement while meeting consumers’ growing desire for authenticity, community and meaningful experiences.
